Zim risks missing gold targets

Published: 25 January 2018

Zimbabwe risks falling short of its 26 tonnes gold production target this year due to liquidity challenges that have seen small- scale miners selling the precious mineral across the country's borders.

The sector has recovered from its three-tonne nadir recorded at the height of Zimbabwe's economic crisis in 2008, but is still short of the 27,1 tonne peak reached in 1999.

In 2017, the country's gold producers fell short of producing the government's set target of 27 tonnes, managing 24,8 tonnes.

Small-scale miners, whose activities have been for long deemed illegal, surpassed their target of 12 tonnes by delivering 13 176 tonnes to the country's sole buyer of the yellow metal, Fidelity Printers and Refiners compared to the large-scale miners who only managed 11 667 tonnes.

Zimbabwe Miners Federation chief executive Wellington Takavarasha said while small-scale miners were targeting to ramp up production to about 20 tonnes this year, chances are high that the targets would be missed.

"The current regime where miners get 70 percent of their payments in US dollars and 30 percent in Real Time Gross Settlement (RTGS) is not sustainable and may cause problems as miners would be forced to sell gold to buyers who pay cash," he said.

"It won't be a surprise if the country misses its gold targets this year as there has been significant reductions in gold remittances since late last year when government began rationaing payments," he added.

The World Bank last year warned that Zimbabwe's small-scale miners were vulnerable to the country's liquidity challenges.

Takavarasha said his organisation is seeking audience with the Reserve Bank of Zimbabwe to review the current system and allow small scale miners to receive their 30 percent in either bond notes or South African rand to avert leaking.

"Mining is a capital-intensive business and miners need to use their money to buy equipment and pay workers, the majority of whom do not have bank accounts, hence the need for cash," he added.

There are over 4 000 recorded gold deposits in Zimbabwe but currently about 40 percent of these are being commercially worked on, according to official data from the ministry of Mines and Mining Development.

The government has been instrumental in supporting artisanal miners who have increased use of improved mineral processing technology through a $40 million gold development facility by the central bank, targeting 179 small-scale miners.

Fidelity Printers and Refiners operations manager David Mpofu said his organisation has so far extended loans to over 300 small-scale artisanal miners across the county, under the Gold Development Fund as uptake of the facility is increasing on rising awareness.

Mpofu said the facility has been increased from the initial $20 million to $80 million on the growing demand.

"Over 300 artisanal miners have been given loans under the fund. The fund has been growing gradually because more gold producers have been coming forward in need of the fund," he said.
- fingaz

Tags: Gold,